When is building a spec home better than buying a fixer?

[Amy Ferguson]

I live in Hawaii and have been having a very hard time finding good fixer uppers on the Big Island where I live... Is there ever a better time to build a spec home than try to fix a dump in a given price range?? Our market has begun to soar again... I have a partner who wants to flip... but his expectations of an all in $300K flip to make 200K is not realistic herein Hawaii 

In this market I think holding and renting will create a higher profit margin over the next 3-5yrs.. Any suggestions?

[Karen Margrave]

@Amy Ferguson  When we moved to southern California after the market crashed, we weren't sure what niche to get into. Our thoughts were the market was probably good for fix/flip. However; in going out and looking at properties we quickly realized that everyone watching HGTV was on the bandwagon and bidding up properties far over market value. 

Being builders with 30 years experience and real estate brokers we knew that with the high demand for housing, and little supply, that if we could buy land for the right price, building spec was the way to go. Aside from that, we have always built new, so it's more what we know, though this high end market is far different from the more affordable one we moved from! 

No matter how much you do to an old house, it's still an old house on the deed. A new house has less problems, is more energy efficient, and has a much longer life span, and you can design it to meet more of the modern needs (open concept, split bedroom, higher ceilings, etc.) and good potential for appreciation in markets such as ours, and probably yours.